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A microeconometric study of theatre demand

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  • Louis Lévy-Garboua
  • Claude Montmarquette

Abstract

We develop a model of theatre demand with learning by consuming, and test some of its implications on a large random sample of theatregoers and non-theatregoers. This seems to be the most comprehensive econometric study of demand for the theatre from individual data. We hypothesize that each time the consumer watches a play, he experiences a degree of pleasant or unpleasant surprise on the basis of which he will revise his future expectations of his own taste. The learning phase is likely to be unusually long for highly differentiated cultural goods. Our set of data contains unique information about the full price and the fixed cost of theatre, the objective quality of the outing, past experience of and taste for the theatre, and consumption of substitute leisure activities such as reading, television and cinema. Our methodology and data enable us to infer price elasticity on survey data from knowledge of theatregoing experience and taste. After controlling for many variables, we conclude that demand for the theatre is price-elastic, which contradicts previous estimates on aggregate time-series data. Moreover, we estimate demand conditional on past attendance after controlling for selectivity bias. Satisfaction reported by consumers after the last play is also estimated and interpreted as an ordinal conditional choice. Copyright Kluwer Academic Publishers 1996

Suggested Citation

  • Louis Lévy-Garboua & Claude Montmarquette, 1996. "A microeconometric study of theatre demand," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 20(1), pages 25-50, March.
    • Handle: RePEc:kap:jculte:v:20:y:1996:i:1:p:25-50
    DOI: 10.1007/s10824-005-5050-y
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    References listed on IDEAS

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    5. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 675-700, August.
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    More about this item

    Keywords

    theatre demand; learning by consuming; individual data; conditional choice and satisfaction (JEL: Z1; L82);
    All these keywords.

    JEL classification:

    • Z1 - Other Special Topics - - Cultural Economics

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